ROMANIAN NATIONAL AGENCY FOR FISCAL ADMINISTRATION (NAFA) Transfer pricing unit. Monica Todose

Transcription

1 ROMANIAN NATIONAL AGENCY FOR FISCAL ADMINISTRATION (NAFA) Transfer pricing unit Monica Todose

2 NAFA has a headquarter located in Bucharest and 42 territorial tax offices; at NAFA headquarter there is an office that has as main duty the coordination of transfer pricing issues and the issuing of Advance pricing agreements (APAs); this unit only coordinates the tax auditing territorial structures in performing transfer pricing tax audits.

3 G.O. no. 92/2003 on the Fiscal procedural code; Law no. 571/2003 on the Fiscal code; G.D. no. 529/2007 on the procedure to issue advance tax rulings and advance pricing agreements; P.O. no. 222/2008 on the content of the transfer pricing file.

4 Fiscal code Definition of affiliated persons (art. 7) Arm s lenght principle (art. 19) Transfer pricing methods (art. 11) Permanent establishments (art. 29)

5 Fiscal procedural code The APA is an administrative document issued by NAFA: for settling the request of a taxpayer; for establishing the terms and the proceedings in which there shall be determined the transfer prices, during a determined period of time; for transactions performed between affiliated entities.

6 Fiscal procedural code Time limit for issuing an APA: Unilateral agreement 12 months Bilateral/multilateral agreement 18 months

7 G.D. no. 529/2007 The procedure for issuing an APA: preliminary discussion at the request of the taxpayer; formal request; documentation.

8 An APA covers a period up to 5 years. Exception: longer availability for long term contracts During the availability period the agreement can be modified thorough the extension of the availability, widening of the agreement or upon case, revision at the request of the taxpayer.

9 Modifying an APA: Extension of the availability - when the initial terms and proceedings are not modified. Widening of the agreement - when there is a request to include in the concluded agreement transactions with some other affiliated party. Revision - when unforeseeable circumstances that could not be predicted from the beginning appear with impact on the terms and proceedings of the agreement.

10 Transfer pricing file for determining transfer prices, at the request of the tax authority, the taxpayer is obliged to present the transfer pricing file in order to document the transactions performed with affiliated entities; the time limit is of 3 months, having the possibility to extend the deadline only once for a period equal to the initial period.

11 In case the taxpayer refuses to present the transfer pricing file, from the tax authority point of view this means: Transfer pricing no justification of the transfer prices used; estimation by the tax authority of the transfer prices; in case an APA was already issued the taxpayer is exempted from the obligation of presenting the transfer pricing file for the transactions and periods covered by the agreement.

12 for the comparability analysis, both for APAs and transfer pricing file tax audits the database used is ORBIS; ORBIS is a global database containing data on over 55 million companies; starting with May 2010, Romanian affiliates are also obliged to present at the request of the tax authority the transfer pricing file; there no difference between the documentary requirements for large taxpayers and SMEs; exception is made as regards the fee to be paid by SMEs for APAs ( Euro for SMEs vs Euro large taxpayers).

13 Finalised tax audits, on types of companies Transfer pricing ( ) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% 4% 17% 54% 53% 45% 46% 42% 38% mari Mijlocii Mici

14 Distribution of tax audits on types of taxpayers mari 9% mici 43% mijlocii 48% mici mijlocii mari

15 Revenues on transfer pricing audits Revenues to the state budget 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% 17% 33% 61% 39% 5% 85% 9% 50% Mari Mijlocii Mici

16 Thank you! Transfer prices